ITAT directs reevaluation of disallowed expenses, upholds interest income addition based on AIR data.

The ITAT partially allowed the assessee's appeal, directing reevaluation of disallowed professional fee and salary expense. The interest income from M/s. Everest Niwara was added based on AIR data, upheld by the Commissioner (Appeals) and ITAT, with TDS credit to the assessee. The ITAT considered tax deduction provisions for professional fee and salary expense, admitting additional evidence for reassessment by the Assessing Officer to ensure fairness and proper verification.

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Issues:
1. Addition of interest income based on AIR data.
2. Disallowance of professional fee for non-deduction of tax.
3. Disallowance of salary expense due to lack of proof.

Issue 1: Addition of Interest Income:
The assessee declared a total income for the assessment year but did not include interest income from M/s. Everest Niwara as per AIR data. The Assessing Officer added the amount as income, which the Commissioner (Appeals) upheld. The assessee argued not receiving the interest and being unaware of it, but as per mercantile accounting, once accrued, it must be shown. The ITAT agreed with the Departmental Authorities, stating that since the interest was credited and tax deducted by the payer, it must be considered income. However, the ITAT directed to credit the TDS amount to the assessee.

Issue 2: Disallowance of Professional Fee:
The Assessing Officer disallowed a portion of professional fee citing lack of proof and non-deduction of tax. The Commissioner (Appeals) upheld the disallowance partially. The assessee contended that as an individual, tax deduction was not required for professional fees. The ITAT admitted additional evidence submitted by the assessee and restored the matter to the Assessing Officer for fresh examination, considering the evidence and the applicability of tax deduction provisions.

Issue 3: Disallowance of Salary Expense:
The Assessing Officer disallowed a portion of salary expense due to lack of proof and non-deduction of tax. The Commissioner (Appeals) partially allowed the claim. The assessee submitted additional evidence showing the genuineness of the expenses. The ITAT admitted the evidence and remanded the issue back to the Assessing Officer for reevaluation, ensuring a fair opportunity for the assessee. The matter was restored for proper verification and examination.

In conclusion, the ITAT partially allowed the assessee's appeal for statistical purposes, directing a reevaluation of the disallowed professional fee and salary expense, considering additional evidence and relevant tax provisions.

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